Challenges in the Chip Sector: Samsung Below Expectations

The electronics giant Samsung Electronics achieved an operating profit of 3.9 trillion won (approximately 2.8 billion US dollars) from its semiconductor division in the third quarter. This unexpectedly low figure falls significantly short of analysts' estimates and lags behind its South Korean competitor SK Hynix. As the world's largest memory chip manufacturer, Samsung was unable to capitalize on the boom in artificial intelligence. The operating profits for the period from July to September fell drastically below the 6.7 trillion won estimated by Bloomberg analysts and below the profit of 6.45 trillion won from the previous quarter. Compared to SK Hynix, which recently reported an operating profit of 7 trillion won, Samsung's competitive disadvantage in the advanced memory chip sector becomes apparent. Due to this shortfall, Samsung issued a rare public apology this month for its weak performance. Samsung's issues in the field of high-bandwidth memory chips (HBM), which are used in AI hardware, stem from failing to pass tests by industry leader Nvidia. Nevertheless, there is hope: On Thursday, Samsung announced it had made 'significant progress' and expects HBM chip sales to increase in the fourth quarter. Despite a more than 30 percent decline in Samsung's stock price since its peak in July, the stock managed to rise by 2 percent on Thursday morning, buoyed by increased hopes for a market recovery in the HBM sector. However, analysts remain skeptical about Samsung's business potential in the HBM field and anticipate a management reshuffle within the chip division next month.